WHAT ARE THE OBLIGATIONS AFTER FORMATION OF A LIMITED LIABILITY COMPANY (S.R.O.)?

Author: Mgr. Daniel Macek, 16. 8. 2022

WHAT ARE THE OBLIGATIONS AFTER FORMATION OF A LIMITED LIABILITY COMPANY (S.R.O.) WHAT ARE THE OBLIGATIONS AFTER FORMATION OF A LIMITED LIABILITY COMPANY (S.R.O.)?

Have you formed a limited liability company and don´t know what to do now? In this article, we will explain what needs to be done and what obligations are necessary following incorporation of a company in the commercial register.

Create a business account

Once your company has been incorporated in the commercial register, you need to set up a business account. All you need is your personal ID card, an extract from the commercial register and an initial minimum deposit which will depend on your bank. In a few days, you will receive a payment card from your bank and your account will be unblocked and available for your company.

Create a company data box

Next, you must set up a data box. We recommend that you thoroughly study all information concerning data boxes to prevent situations when documents are delivered to your company by state administration authorities without your knowledge as a company representative. In accordance with legal regulations, each newly formed company is automatically provided with a data box (under the law, every legal entity registered in the commercial register must have a data box). Each data box contains a unique identifier that distinguishes it from others.

To log in to the data box, you need access data, i.e. a username and a password. These access data are always sent by the Ministry of Interior and are delivered “to the addressee only”, in this instance to the executive. The data are usually delivered within 7 days following registration of the company to the address listed in the commercial register, which is the executive´s permanent residence address, or to the executive´s delivery address provided in the population register.    

Please note that electronic communications are delivered upon login to a data box. It is irrelevant whether the particular message was opened and read. If you do not check your data box, a so-called fiction of delivery will apply. It means that a message will be deemed read 10 days following delivery to a data box even when you have not logged in. Therefore, you need to check your data box at least once every 10 days.

Tax registration

Each newly formed limited liability company is also obliged to register for applicable taxes with the locally competent financial revenue office within 15 days after registration in the commercial register. Registration is done only via data box. No other method is possible. If you would like to visit the tax office in person, it will be a waste of time in this case. Every company is required to register for legal entity income tax (regardless of whether it will have any income).     

The company may also be subject to other taxes:

  • Road tax: If the company owns a vehicle it will be subject to a road tax.
  • Personal income tax from employment and emoluments: If the company pays remuneration to the members of statutory bodies or has employees, it is also required to register for the relevant personal income tax.
  • Value added tax: Registration for VAT is not necessary at the beginning (only entities with a turnover exceeding CZK 1 million for the past 12 calendar months are mandated to register for VAT). However, it could be advantageous for certain types of business.

Take note that you need to register for the aforementioned with your trade license office as it is serves as a central registration point. Individual offices are connected, so you make all necessary registrations there. Nevertheless, based on our experience, we recommend checking whether all registrations have been successful with individual offices.

Obligations related to employees

If the company has at least one employee, it is obliged to:

  • register in the register of employers with the relevant district social security administration within 8 calendar days from the start of employment of the first employee and announce the start date;
  • register in the register of employers with the relevant health insurance company (jurisdiction is determined according to the employee's health insurance company) within 8 calendar days from start of employment,
  • register the employee with the locally competent tax office for personal income tax,
  • arrange the statutory liability insurance (all new employers must register with state-appointed insurance company Kooperativa pojišťovna, a.s., Vienna Insurance Group).

Register of beneficial owners

  • Register of beneficial owners is a public administration information system, including information on beneficial owners of companies as defined by relevant laws. The records are partially public since June 2021 and anyone can view their electronic version on the website of the Ministry of Justice. A beneficial owner is considered to be a natural person who has, in fact or in law, the capacity to exercise (directly or indirectly) a decisive influence in a legal person.
  • Beneficial owners of the company will be entered in the register of beneficial owners by automatic registration after the company is registered in the commercial register. This entry needs to be checked to see if it corresponds to reality.
  • If the automatic registration does not take place or the entry in the register does not correspond to reality, the newly established company is obliged to submit a motion for registration of its beneficial owner immediately after registration in the commercial register. The motion is submitted in via the so-called intelligent form to the relevant register court, which is obliged to make an entry in the register no later than 5 working days from the date of delivery of the motion.

If you follow our checklist, you will fully comply with all relevant obligations.  

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